❓WHAT HAPPENED: The U.S. Department of Health and Human Services (HHS) found that Minnesota’s child care agency failed to properly verify attendance records or pursue fraud tips, according to a letter following an oversight visit.
👤WHO WAS INVOLVED: HHS, Minnesota’s Department of Children, Youth, and Families (DCYF), and state officials, including Governor Tim Walz (D) and Commissioner Tikki Brown.
📍WHEN & WHERE: Oversight visit conducted January 22-23, 2026, with findings outlined in an HHS letter on Monday, March 2, 2026.
💬KEY QUOTE: “Minnesota did not demonstrate that they are currently implementing required program integrity training for providers across the state.” – Laurie Todd-Smith, HHS ACF Deputy Assistant Secretary.
🎯IMPACT: Federal funds may be withheld if Minnesota fails to address the outlined issues, with $184.9 million in taxpayer funding at risk.
The U.S. Department of Health and Human Services (HHS) has revealed that the Minnesota Department of Children, Youth, and Families (DCYF) failed to adequately verify attendance records or pursue fraud tips in its Child Care Assistance Program. Findings from an oversight visit conducted on January 22-23, as revealed in a letter published on March 2, contend that the state agency lacked sufficient staff and resources to combat fraud effectively, with only four investigators assigned to address potential violations.
Concerningly, Laurie Todd-Smith, Deputy Assistant Secretary for Early Childhood Development at HHS, found that Minnesota’s DCYF “[l]imited staff and resources… to adequately pursue fraud tips and conduct proactive investigations.” Additionally, the Assistant Secretary noted, “Minnesota did not demonstrate that they are currently implementing required program integrity training for providers across the state.” This suggests that Governor Tim Walz (D) and other state officials have taken no proactive steps—despite their public claims—to curb ongoing social services fraud in the state, and have raised concerns about the misuse of federal funds, as child care centers could receive payments without reconciling billed hours against attendance records.
Todd-Smith also stated in the letter that Minnesota lacked a mandatory statewide process for reviewing and acting on county-level single audits. She also highlighted that the state had not conducted necessary “onsite visits” to ensure compliance, a requirement emphasized in previous federal audits. The Trump administration previously flagged concerns about fraud in Minnesota’s child care programs, with President Donald J. Trump alleging that as much as $19 billion in federal funds may have been misappropriated.
Minnesota received $184.9 million in taxpayer funding for youth services in fiscal year 2025. HHS has warned that these funds could be withheld unless the state provides attendance and inspection records within 60 days.
Join Pulse+ to comment below, and receive exclusive e-mail analyses.
